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National Foreclosure Inventory Drops 23 Percent Year Over Year

Serious Delinquencies Fall 22 Percent Year Over Year

Molly Boesel    |    Mortgage Performance

  • The foreclosure inventory fell 23 percent year over year in April 2016.
  • The inventory of mortgages in serious delinquency fell 22 percent year over year in April 2016.
  • All states except North Dakota had a year-over-year decrease in the serious delinquency rate, but the increase was minimal.

The national foreclosure inventory – the number of loans in the foreclosure process – fell 23.4 percent year over year in April 2016, according to the latest CoreLogic Foreclosure Report. The foreclosure inventory has fallen on a year-over-year basis every month since November 2011 (Figure 1) and in April 2016 it was 74 percent below the January 2011 peak.

The foreclosure rate – the share of all loans in the foreclosure process – fell to 1.1 percent in April 2016, down from 1.4 percent in April 2015. While the foreclosure rate is back to 2007 levels, it is still above the pre-housing-crisis average foreclosure rate of 0.6 percent between 2000 and 2006.

Figure 2 shows that, collectively, judicial foreclosure states[1] continued to have a much higher average foreclosure rate (1.7 percent) in April 2016 than non-judicial states (0.6 percent). The collective foreclosure rate in non-judicial states is close to the pre-crisis rate of 0.4 percent, while the foreclosure rate in judicial states is more than double the pre-crisis rate of 0.8 percent. As of April 2016, judicial states had 42 percent of the nation’s outstanding mortgages but 69 percent of all loans in foreclosure.

Judicial Foreclosure

Judicial Foreclosure

Florida recorded the largest year-over-year drop in foreclosure inventory, falling by 37 percent. North Dakota was the only state in April 2016 to post a year-over-year increase (10.8 percent) in the foreclosure inventory, a possible sign the state is starting to feel the effects of lower oil prices. The foreclosure rate in North Dakota remained low, however, at just 0.5 percent of outstanding mortgages in the state.

Serious Delinq Rate and FCL

Serious Delinq Rate and FCL

The serious delinquency rate – the share of loans 90 or more days overdue – was 3 percent in April 2016, down from 3.7 percent in April 2015. The April 2016 inventory of mortgages in serious delinquency fell 21.6 percent year over year and were 69 percent below peak. The serious delinquency rate fell year over year in all states except North Dakota, where it remained essentially flat.

1 In judicial foreclosure states, lenders must provide evidence of delinquency to the courts in order to move a borrower into foreclosure. In non-judicial foreclosure states, lenders can issue notices of default directly to the borrower without court intervention. This is an important distinction since judicial foreclosure states have longer foreclosure timelines, thus affecting foreclosure statistics.

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